LABOUR AND MONEY.

Press, Volume LXIX, Issue 20773, 6 February 1933, Page 8

LABOUR AND MONEY.

| REPUDIATION OF POLICY | ALLEGED. SOCIALIST PLANS FOR ECONOMY. Criticism of the Labour Party for its attitude towards the economic problems which confront the world to-day was expressed bv Mr Lloyd Ross, a. tutor under the Workers' Educational Association at Dunediii, m a lecture before Christchurch students and others interested in the matter, at ■ the Trades Hall on Saturday evening. Mr Ross accused the Labour Party of having repudiated its former Socialistic ideals in that, where its old policy was to aim at a bettering of conditions by a change in the whole eonomie system, it now advocated merely a monetary solution of the problem. Labour opposed any legislation which would mean the raising of prices for the workers, the lecturer said, but at the same time proposed certain monetary changes which, he contended, would only result in the same inflation of prices. A plan to ovorcome all difficulties, and the acceptance of all the implications of such a plan, were needed. Two economic systems which the speaker outlined were the only two he claimed 'which were probably- applicable to the present situation. To-day economists were trying to work the two together, and were intensifying their difficulties. People could support a Downie Stewart and they could support a Lenin, but they could not support a hybrid between the two,, he said. Mr t ßoss, whose lecture was entitled "Labour and the Money Problem," will leave shortly to take up a permanent position in the Workers' Educational Association at Newcastle, Australia. No Solution at Present. "We should not be afraid to admit that there is no solution, as things arc at present, to the difficulties which beset the world," said Mr Ross. "I do not mean by that that there are no possibilities of preparing paper plans for prosperity, or that there will be an immediate crash, but I can see that we are going to drift, as we are doing now, for years to come." The lecturer stated that his point of view was that the monetary difficulties of the present time wore merely the result of economic difficulties, which could bo solved, not by any monetary change, but only by a change in the 1 economic system. The Labour Party, in its search for votes, had thrown over most of the fundamentals of the Socialist and Labour conception of the problem. A Complex System. j The three main objections to the present economic system were its complexity, the fact of its being based on the ownership of private property, and of its necessary connexion with private competition. The system was complex because it necessitated the transhipment of commodities from ono side of the world to the other,, and because it involved tlio anticipation of the demands of buyers and the production of goods ahead of demand, whereas it was impossible, in the present system, for manufacturers to bo sure that people would want what was being put on tho. markets. It did not matter how much money was available for purchase, the speaker said, for there were difficulties of this nature in tho capitalistic method of production which would cause chaos. Public tastes changed rapidly, and there was the ever-present chance of a new invention upsetting an entire industry. No manufacturer was absolutely euro that tho people who had the purchasing powor on which he relied would want the things he was manufacturing. Tho wholo tendency in tho past had been against the practice of anticipating a market. A Wobbling System.

"This economic system does function after a style," continued tho lecturer. "It wobbles along all right; but it is only the free movement of prices, the movement of capital, and of workers from ono country to another, which has kept it going. There is even a school of economic thought which that the system is perfect. Theoretically tho idea of free mechanism of prices is quite sound, but if every country agreed to let prices move as rapidly as possible up or down, until they reached an equilibrium, there would have to be tremendous suffering, although ultimate stability would be achieved. The reason that the system has failed is that no group of people in tho world has been willing to allow prices to have frco movemnt. There has always boon some sort of fixation, control, and interference. I put aside the system bccauso .it is practically impossible; because no government is prepared to see prices tumble fn the effort for equilibrium, and to suffer the consoquonccs.

Planned Production. Mr Ross then referred to another economic system—that of planned production and consumption—and the system which the Russian Soviet is endeavouring to work out. It was a method of control and of very correct estimate, and was independent of the amount of money in existence, ho said. "These two systems are the only methods of meeting tho problem of money, but to-day, instoad of following cither one, wo are trying to work the two together, and the rosult "is an intensification of the difficulties of the price sottling system. In tho complications which have resulted, we find that wages cannot possibly be raised, because that action leads to further unemployment, and that wo cannot relieve otir troubles by fiddling with interest, because of the demands of private property and the respect for contracts which the present system has to recognise. In fact, both the methods I have outlined are logically correct; but, for the one involving planned. production, in its execution people would have to be prepared to give up a good deal of what they now call liberty, they would have to change completely their attitude towards work and leisuro and their ideas on the rights of private property. In the other system they would have to be prepared to allow wages to; go up and down as they willed. Labour's Position. Thero was a third school which be- 1 lieved in. some sort of monetary change, by which it was hoped to get the bene-j fits of one system without its difficulties, said Mr Boss, but all three schemes wore inconsistent with the theory and history of the Labour and Socialist movements. Labour had some schelne for {lie issue of free credit, for instanca, but it was impossible to socialise credit without socialising industry as well. It was stupidity or timidity to propose one and not the other. Ideals were all right and intentions very good, but a real choice had to be made. Where did Labour policy stand in that light, he askedt Tho old socialistic policy of Labour meant the repudiation of the system of a mechanised market, and of private property rights. Labour looked to planned production in the old days. Its theory was that unemployment was the result of the maldistribution of wealth preventing the workers from buying back the thing* they pro-

duccd. The Party bolievod then that the difficulties of the time were economic and that only economic change could solve them. Now Labour talked about some monetary method—the issue of credit, for instance—for the improvement of the purchasing power of the workers. In fact, Labour thought was turning towards the system of Douglas credit; but between Douglas credit in its pure form, and Labour in its nonpolitical form, there was a clear difference. Repudiating Socialism. "The Labour idea is that the cause of our troubles, is monetary, and not economic," reiterated the speaker. "They are repudiating Socialism. Labour now believes in a State bank, for instance, but is it a State monopoly of banking or merely an institution to compete with other banks that they aim at I I do not think that Labour has ever made that clear. A State banking monopoly iwould be a logical thing, but a competitive State bank Would be ineffectual. Labour suggestions ftre all towards some form of inflation, which, after all, can mean only an ultimate rise in prices. This i 6 amusing, because they have opposed the lifting of the exchange rate on the grounds of its resulting in higher prices for the workers. "For r, while Labour has soothed us with the suggested issue of credit, but the fallacy of the issue of credit is that there is no guarantee that it would be applied as it was intended, or that prices would remain at a desired level. We want to plan for a system which will ovoreome our difficulties, and to accept all the implications of that plan. Labour is not doing this, and is merely making worse the present difficulties. Labour believes in constitutional change, but the real complaint against the Party is that it is Communistic in | its final ideals, Socialistic in its platform ideals, and fallacious in the things it tells us about."